Friday, Feb 03 2012
• 10 a.m. (ET)

Friday News Roundup – Domestic

Republican presidential candidate Mitt Romney opened up a 20-point lead over Newt Gingrich in the upcoming Nevada caucus; the Obama Administration unveiled a new homeowner refinancing plan; and Senate Democrats formally introduced a “Buffett Bill” that would tax millionaires at a minimum rate of 30 percent. Naftali Bendavid of the Wall Street Journal, Jackie Calmes of The New York Times and syndicated columnist Steve Roberts join Diane for analysis of the week’s top national news stories.

Transcript

10:06:56

MS. DIANE REHMThanks for joining us. I'm Diane Rehm. The unemployment rate dropped to 8.3 percent after a surge in hiring last month. Mitt Romney headed to Nevada with a double-digit lead after a decisive win in Florida's GOP primary, and President Obama unveiled a new program to help struggling homeowners. Joining me for the domestic hour of our Friday News Roundup: Naftali Bendavid of The Wall Street Journal, Jackie Calmes of The New York Times and syndicated columnist Steve Roberts.

10:07:55

10:07:56

10:07:56

MR. STEVE ROBERTSGood morning, Diane.

10:07:56

REHMGood morning to all of you. Naftali, let's start with the unemployment rate. It seems to have caught everybody by surprise.

10:08:08

BENDAVIDYeah. There are a lot of articles and statements in this morning's paper about how unemployment would remain at 8.5 percent and that maybe the economy would have added 130- to 150,000 new jobs, and, instead, it exceeded that. And, in fact, unemployment dropped to 8.3 percent, and there are 243 new jobs created in January.

10:08:25

REHMTwo hundred and forty-three thousand. Yeah.

10:08:26

BENDAVIDThousand, I'm sorry. And I think that's important, in part, because there was a real spike in December. And so the question was, was that just due to the holidays? Was it due to the additional employment and purchasing that you see over the holidays? And so this January report was really going to be closely watched to see whether we fell back, as we have so many times in the past, or whether the momentum continued. And it looks like it continued in a way that surprised a lot of economists.

10:08:50

REHMJackie.

10:08:51

CALMESI completely agree with that. And I -- my only add at this point, whenever we get into these discussions, that it has been true for, like, the last three years that there has been sort of good news, at least a good trend, on the unemployment front.

10:09:06

CALMESAnd the White House would be the first to tell you that fear of the spring, that every year of his term there has been -- 2010, 2011, two years -- past two years, there have been external events that have come in, whether it was the euro crisis flaring, the BP oil spill or the tsunami in Japan, that these headwinds come in and blunt whatever growth we have and put us back to stagnation.

10:09:34

REHMSteve.

10:09:35

ROBERTSWell, it's absolutely what they fear most is Europe and the continuing problems in Europe. Stock market is up this morning on the news, but Europe remains in dark cloud. But this plays very much into the Obama storyline that we heard in his State of the Union address. The core of his address was the state of the union is getting stronger. He didn't say it was good 'cause he can't say it's good. Even at 8.3 percent, it's not good. You can't run on "Happy Days are Here Again" at 8.3 percent.

10:10:02

ROBERTSBut if you can say we're on the right track, the direction is critical -- and that's why politically, even though it's not that big a deal economically, politically, it plays into the Obama storyline.

10:10:14

REHMWhat about CBO and how the CBO is framing all this?

10:10:20

BENDAVIDWell, that's another issue. The CBO came out with -- well, first of all, they said that the deficit in 2012 is going to be $1.1 trillion, which is one of -- I think it's the fourth straight year of deficits more than $1 trillion. They predicted that unemployment would remain high, would remain over 8 percent for a couple more years. But, you know, the deficit number is another interesting part of all this, and it highlights to my mind one of the big failures of the current Congress.

10:10:44

BENDAVIDI mean, everybody agreed that their big task coming in was going to be the cut, you know, of several trillion dollars from the deficit. They tried all year to do it, and they failed. And now, they've set themselves up where they sort of have to cut $1.2 trillion by the end of this year, but it's an election year. Not clear how it's going to happen. And so I think what we're going to see actually is -- after the election is frenzied lame-duck session where they try to abruptly cut a lot of money from the deficit. And they really set themselves up in sort of a bad way.

10:11:11

ROBERTSBut Ben Bernanke this week warned not to cut too quickly, and this has been the dilemma for years now. How do you deal with the deficit and -- but not move so quickly that you choke off what still remains a very fragile and tentative recovery? And Bernanke warned very quickly, even though he's been a deficit hawk, he said don't move too quickly because you can choke off the recovery. And that balancing act is at the core of the dilemma policymakers are facing.

10:11:35

REHMAnd then he said in response to a member of Congress who said, well, what do you do if inflation starts moving up? And Bernanke said we'll handle it. Jackie.

10:11:48

CALMESRight. Well, and this is -- you know, this is a central messaging problem that the administration has had from the start, is that we have this debt crisis looming. It was going to happen even if there'd never been a Great Recession because of the aging of the population, the baby boomers and the pressure they're putting on this very expensive benefit programs: Medicare, Medicaid and Social Security. So then you layer on the recession, which cost in revenues and in automatic safety net payments, and you have a -- you know, you start by digging the hole deeper.

10:12:24

CALMESSo what they've -- what -- go back to what Steve said. The answer Ben Bernanke, and almost any economist, will tell you is to cut the future deficit projections. Don't cut now. In fact, you should -- most people advise, add spending now, cut taxes now. But at the same time you're doing that, take actions that will only take affect, say, after 2014 that will put in place the mechanisms to cut the future debt projections.

10:12:55

BENDAVIDBut, I mean, I think the economic news of today, you know, shouldn't be underestimated. And I think part of it is really political. If there's a central message that the Republicans have, it's what Obama is doing isn't working. I think he can really be summed up that way. You know, he may be a good guy. People like him. But, hey, he's in over his head. It ain't working.

10:13:12

BENDAVIDAnd so to the extent that people feel in their hearts that maybe it is working, that's going to be good for Obama. To the extent they feel in their hearts that'll be good for the Republicans. And the battle is going to be over which of those messages resonates.

10:13:25

CALMESRight. And yet, you know, this comes as the unemployment report with, relatively speaking, good news comes a day after Mitt Romney, the frontrunner for the Republican nomination, has revived this remark he makes -- he made it when he first announced his candidacy for president that the -- that President Obama did not inherit the recession, but he's made it worse, which is provably false. And he was called on it initially and then seemed to retire the phrase. And he used it again yesterday during his -- the -- an event he had with Donald Trump where Trump endorsed him.

10:13:59

ROBERTSWell, another way to put this is the -- Obama is talking about making sure that this election is framed as a choice. The Republicans are trying to say this is a referendum. And even with good economic news, 8.3 percent is not great, even -- it's not going to improve substantially.

10:14:16

CALMESRight.

10:14:17

REHMYeah, but it's a trend.

10:14:19

ROBERTSIt is a trend.

10:14:20

CALMESYeah, right. You're correct. True.

10:14:20

ROBERTSThat's exactly right. And that -- but the other factor is that only 29 percent of Americans think the country is headed in the right direction. Obama's approval ratings are still under 50 percent. No president has been re-elected with approval ratings under 50 percent in a long time. So the lot and the numbers are against him, but he can make this argument. As Naftali says, it's working, and don't change course now. That's going to be the heart of the message.

10:14:44

ROBERTSAnd the other thing is going to be, don't vote on are you better off than you were four years ago? 'Cause, even with these numbers, a lot of Americans are going to say no. But he's going to try to argue, will you be better off in the next four years with me or the Republican. It's a very different question, Diane.

10:14:58

REHMSteve, you talked about the messages in the president's State of the Union. He talked about a new refinancing proposal for individual homeowners underwater. What are the details of that?

10:15:16

ROBERTSWell, basically, what they're trying to do is say that if you have good credit, if you have made your mortgage payments, if you are an owner-occupied house -- there are a lot of conditions on this -- we will help you take advantage of these rock bottom, historically low rates. The point being that if you can cut $2-, $3,000 off people's payments, that's disposable income that they will spend on other things and inject into the economy. And that's the basic concept.

10:15:48

ROBERTSBut it can be costly because someone's got to subsidize those interest payments. And the Republicans are very unhappy about any kind of a raise in fees. Obama's proposal says we'll pay for it by fees on the banks. It's more of a political argument than an economic argument, given the fact that the Republicans are likely to stop it. But it does get at the point that Obama is trying to make, which is government has a role to help people.

10:16:17

REHMJackie.

10:16:18

CALMESWell, that's exactly right. And the thing about this particular housing initiative from the president is that it requires legislation. Previously, in the last, you know, couple of iterations on their housing policy -- which they're the first to admit has not done what it's been promised to do -- they've done it by executive action. This needs Congress to act, which makes it problematic.

10:16:40

CALMESThat said, what's interesting, when you listen to the president talk about the housing, he always -- you know, you could count the number of times he uses the word responsible in defining homeowners who would benefit because that gets to what is the central political problem he or anyone trying to address this has. They know that the housing problem is a drag on this economy, which is the single biggest factor accounting for why the recovery has been so slow.

10:17:05

CALMESAt the same time, Americans think that to do anything big about it is going to be bailing out irresponsible homeowners who bought houses they couldn't afford.

10:17:15

BENDAVIDI mean, there's a bigger philosophical difference here, though, than just the bank fees because a lot of the Republicans feel like the crisis needs to be allowed to run its course. And artificially propping up people who maybe shouldn't be able to be in houses that they can't afford is going to do more long-term damage than good. Mitt Romney has said -- he had this comment about how the market should be allowed to hit bottom. So the Democrats are sort of highlighting this contrast between their desire to help homeowners and the Republican's desire to kind of let things fall where..

10:17:40

CALMESRight.

10:17:41

ROBERTSAnd this week, the Democratic National Committee, in picking up on some of Romney's comments, used that clip in their newest ad. So you're absolutely right. This is an issue that they feel they have an advantage on, and that the Republicans look hard in saying, let market forces work without a role for government to help the more responsible homeowners.

10:18:02

REHMAnd as I understand it, only Fannie and Freddie mortgages are going to be eligible. When we come back, we're going to talk about Freddie Mac and the controversy that has now erupted over exactly how Freddie Mac played its hand. Here with me: Naftali Bendavid of The Wall Street Journal, Jackie Calmes of The New York Times, Steve Roberts of George Washington University, syndicated columnist.

10:20:05

REHMWelcome back to the domestic portion of our Friday News Roundup. Just before the break, we were talking about the president's plans to help underwater homeowners. There is going to be a lot of debate over that in Congress. Whether it gets through is anybody's guess. At the heart are Fannie and Freddie. Naftali, there's a brand-new controversy about Freddie Mac. What are they accused of doing?

10:20:41

BENDAVIDWell, actually, this comes out of some investigative work initially done by NPR and the group ProPublica. The idea essentially is that Freddie Mac is involved in these derivatives called inverse floaters. And the long and short of it is that they benefit when people stay in high-interest mortgages, at the same time that the mission of the agency in part is to help people get into lower-interest mortgages if they can. Hence, the idea is that this creates a conflict of interest.

10:21:05

BENDAVIDAnd it turns out that this is something that was raised by the group's regulator last year. It's something that they say they don't do anymore. Although, a portion of their portfolio apparently still is in these derivatives. And, you know, Fannie and Freddie are facing a lot of controversy, a lot of trouble, a lot of criticism on a lot of fronts, and this certainly doesn't help the matters.

10:21:22

REHMJackie.

10:21:24

CALMESWell, Edward DeMarco has been a figure that has not gotten a lot of attention or as much attention, perhaps, as he should because, as we've talked about earlier, just how important the housing problem is to the economy's recovery and holding it back -- and he is the conservatory. He is in charge. He's a Bush administration holdover who is in charge of these two government-sponsored entities, who are the mortgage finance giants.

10:21:53

CALMESAnd he has been very conservative in his judgment about just exactly they can operate, how they can -- how much -- to what extent they will allow mortgages to be refinanced, and, here, you have an example where he's taking what some people wouldn't consider a very conservative viewpoint.

10:22:14

REHMLet's be clear here, Steve. Former bond trader Allan Boyce told NPR that Freddie Mac prevented households from being able to take advantage of today's mortgage rate and that they then bet on the fact that many of these mortgages would fail.

10:22:42

ROBERTSNow, DeMarco, in an interview this morning with NPR, keeps making the point that one of their obligations is to maximize the health of their portfolio. And so they're saying, we benefit homeowners by making investments, which produce revenues. But there is this inherent conflict that -- at the heart of this. And the optics are terrible. There are other ways to make money. There are other ways to protect the funds that you then use to lend out and -- as opposed to do doing this. And it just is politically tone-deaf to do something like this and then to try to defend it.

10:23:21

REHMWas Fannie accused of doing any of that?

10:23:26

BENDAVIDI don't think so. I don't think Fannie's name came up in this. But it does play in, as I was saying before, to this sort of larger sort of controversy, if you will, certainly, criticism of Fannie and Freddie. You know, when the housing market first imploded, there was a lot of attention in the banks and the mortgage providers. But then conservatives, in particular, started saying that if Fannie and Freddie had done less to keep people in their homes, who maybe couldn't afford it, you know, that that would -- contributed as well.

10:23:50

BENDAVIDSo just yesterday, the Senate voted against giving bonuses to people in Fannie and Freddie, and there's a move afoot to wind down those organizations entirely. And they've just faced a huge amount of criticism in the whole thing.

10:24:02

CALMESYou know, the Republican presidential candidates, like Republicans on Capitol Hill, have -- liked to blame Fannie Mae and Freddie Mac for the entire crisis that we've faced.

10:24:13

CALMESWhen -- this reasoning that Edward DeMarco talks about that they engaged in these derivatives in order to -- or it was a legitimate thing to do to maximize profits into the extent that would help the taxpayers, this is the same reasoning they gave a couple of years ago as to why they got into the mortgage-backed securities business, which, of course, turned out when those mortgages turned out to be not good ones, that they lost money like everyone else.

10:24:41

CALMESFannie Mae and Freddie Mac did not cause this crisis. In fact, they were latecomers to the mortgage-backed securities game. But they got into it for this very reason that they wanted to make more money, and they justified it by saying that, ultimately, the more money they made, the more taxpayers would benefit.

10:24:56

ROBERTSAnd also, the whole aura around these two organizations has become highly politicized. And there's Newt Gingrich, who works for Freddie Mac as a historian, as we've learned at a tune of a million-and-a-half bucks. And that has just added to this notion that these are not just financial institutions trying to do the public good, but they're highly political entities and have been for a long time in this town, with very large lobbying budgets. And the whole reputation has gotten undermined. And even yesterday, the president talked about long-term loaning to try to wind down these agencies.

10:25:31

CALMESYeah, I would just add to the politicization and just how political these organizations were. When I used to cover them somewhat in the 1990s, when I was working at The Wall Street Journal, it was well-known in this town that Freddie Mac was sort of -- they both had, you know, former Democrats and Republicans, you know, that would come out of revolving door after you served in the administration. You might go make money at one of those organizations

10:25:51

ROBERTSLots of money.

10:25:51

CALMESBut -- yeah. And Freddie Mac was generally considered the Republican's agency, and Fannie Mae was the Democrat's agency. And it was just well-known in this town, and that's where there was sort of this mutually assured destruction. Nobody -- there were a few -- the people who went after those organizations were a few sort of, you know, lone voices in the Republican Party usually. And -- but both parties had something to gain from those.

10:26:17

REHMDo you think they will be wound down, Naftali?

10:26:20

BENDAVIDWell, it wouldn't surprise me if there is some major change that takes place, you know? Maybe the creation of another agency to take their place, but some kind of major reformulation because I do think that their aura, their name has become sufficiently tainted that's it's hard for them to be sustained. I don't know if that will happen this year in the middle of an election year. But whoever wins the next election, it would not surprise me if some major action is taken to change those agencies.

10:26:41

REHMOK. Jackie, let's move on to the Susan G. Komen group. Why did they withdraw funding for Planned Parenthood?

10:26:51

CALMESWell, it depends on what day you talked to them this week. Initially, they were saying that they withdrew because they had come up with this new policy, which amazingly enough only pertained to Planned Parenthood in their definition, which was that they would not give grants to organizations that were under investigation. Well, of course, Planned Parenthood, as a hazard of its role in providing, you know, full services to -- regarding women, including abortion referrals, was -- is almost always under investigation in Congress when Republicans are in the majority as they are now.

10:27:30

CALMESSo -- but more -- today or yesterday when this became a furor about their decision to withhold grants, which aren't a huge amount of Planned Parenthood's budgets, so it's sort of the principle here -- but when they -- yesterday, their reasoning was that they were -- had decided only to give money to people who directly provided mammograms rather than just referrals. So it's clearly only added fuel to the fire.

10:28:00

BENDAVIDI mean, I think the irony is that the Komen group was trying to avoid controversy, and they've always been this group that kind of try to be above the fray. Nobody's against fighting breast cancer. And they had the pink ribbons and the races, and everybody's in favor of it. But Planned Parenthood turns out to be one of these groups that's a real flashpoint.

10:28:14

BENDAVIDWhen the Republicans came in last year, along with NPR, actually, you know, Planned Parenthood was one of the groups they try to defund because, you know, they provide abortion services and -- but, instead, the backlash has been really something to behold. I mean, members and leaders of the Komen group itself have protested -- a lot of members of Congress. Nancy Pelosi said it was unfortunate. Michael Bloomberg is giving a quarter of a million dollar donation to try to make up the funds.

10:28:39

BENDAVIDDonations have been pouring into Planned Parenthood. Apparently, they've also been pouring into Susan G. Komen because the anti-abortion folks are very supportive of this, and it's become this enormous furor that, it seems to me, in watching them the last few days, they're not really equipped to handle. I mean, the damage control has not been good. They have given contradictory story -- stories, and they don't seem to know where to go from here.

10:28:58

REHMIs this part of the anti-abortion debate? The appointed vice president, Karen Handel, apparently has made no secret of her anti-abortion stance. She apparently ran for Congress...

10:29:17

ROBERTSFor governor.

10:29:18

REHMFor governor...

10:29:18

CALMESOf Georgia.

10:29:18

ROBERTSOf Georgia.

10:29:19

REHM...on this very issue.

10:29:20

ROBERTSShe did, of defunding Planned Parenthood.

10:29:22

REHMExactly.

10:29:22

ROBERTSWhat I think this is is a proxy for the culture wars, and it's a much larger issue. These wars have been simmering in America for a long time. They've been on the back burner in the Republican primaries because there's no real difference -- and Republican candidates, except occasionally -- Gingrich will attack Romney for his previous support for abortion rights. But these issues are highly incendiary.

10:29:45

ROBERTSThere are people on both sides who feel very, very strongly. And the reason why, over a relatively small amount of money -- we're talking about $700,000 -- why has this exploded is because this is a proxy for a much larger division in American society about the role of government in telling women how to deal with their reproductive systems and the larger culture wars and value clashes. And that's what this is really all about.

10:30:11

CALMESI agree totally with Steve on that. And I -- on this one, though, I think, you know, even people -- Diane, you had a show yesterday, a panel where they talked about this a little bit, and there was not a lot of -- you know, you had a representative of a women's group and someone from the Catholic Church, or Catholic University, wasn't it?

10:30:29

REHMYes.

10:30:29

CALMESAnd the thing is this -- when they came out and first explained -- when the Komen group, that is, had first explained why they were withholding money from Planned Parenthood and they made this reasoning about groups under investigation was really, really, you know, a, you know, low blow, really. I mean, when you consider it, it's...

10:30:50

REHMBecause?

10:30:50

CALMESIt makes people think it's a criminal...

10:30:52

REHMExactly.

10:30:52

CALMES...investigation when this is simply a partisan congressional investigation. And it was just -- you know, even women I've talked to who are -- who say the Komen group is within their rights to not give money to a group because they take money from people who are anti-abortion rights, then they shouldn't -- you know, these people don't want them giving money to groups that are plainly pro-abortion rights. So -- but the fact is if you're -- you know, if you're going to adopt that policy, don't slime the group in -- while you're taking their money away.

10:31:22

BENDAVIDI mean, and even more broadly, the idea of punishing a group that's under investigation, even if it were a criminal investigation, criminal investigations get started. Sometimes the person is exonerated. It was a very weird thing to say. And the fact that then they came out with this idea of mammograms versus screening, it just really is not clear what they're getting.

10:31:37

REHMWait a minute. Let's talk about that phrase under investigation. It's my understanding that one member of Congress has simply raised the question.

10:31:49

ROBERTSThat's true. Cliff Stearns, a Republican from Florida, has done this. And I agree...

10:31:55

REHMHe raised a question as to?

10:31:58

ROBERTSAs to whether Planned Parenthood is playing by the rules. You know, Planned Parenthood operates already under very strict rules, not being able to use public money in any way for abortion services. But the larger question here -- and it's an interesting point -- elections have consequences. And, you know, you look at the Republican control of the House, and you say, well, they have no power to pass legislation.

10:32:20

ROBERTSThey do have the power to hold hearings. We've seen this this week in three or four different places, Holder being called up by congressional hearings to answer questions.

10:32:27

REHMI want to get to that.

10:32:29

ROBERTSAnd this is -- I agree completely that investigation sounds ominous when it's not really very fair. But it does remind you that one of the powers of a majority in Congress is to set the agenda, hold hearings, shine a spotlight on certain issues. And it is one of the important powers. And the -- it also reminds you that if Obama's re-elected, he's going to spend four years answering the same kind of questions 'cause Republicans are going to have the same kind of control.

10:32:55

BENDAVIDWell, and that's not an accident. Speaker Boehner, in a meeting with House Republicans a couple of weeks ago in Baltimore, in this retreat they had, said, this year we're going to focus on oversight and investigation. You know, there's going to be a referendum on Obama this year, and that's what our role is going to be. So it's a very clear mission that they're setting out, and it is a valid role of Congress to do that. And that's why this is happening.

10:33:15

REHMNaftali Bendavid of The Wall Street Journal, and you're listening to "The Diane Rehm Show." Let's talk about Eric Holder and what happened yesterday on Fast and Furious. And, first, Steve, explain what Fast and Furious is.

10:33:38

ROBERTSWell, this is the sixth time he has been dragged before Congress on this issue. And it's -- it keeps getting replayed, the same argument. It's a very complicated situation. Apparently, the Alcohol, Tobacco, Firearms bureau had the strategy. It's called gunwalking, in which they allowed illegal purchases of guns to go forward in the hope of tracking those purchases so that they could "arrest bigger fish."

10:34:10

ROBERTSThe whole thing went awry because these guns, which they apparently allowed to be purchased and distributed, were then used in the killing of a border patrol agent, and it became a highly explosive issue. The whole policy of gunwalking goes back to the Bush administration. It didn't start with Eric Holder and the Democrats.

10:34:28

REHMStarting in 2009.

10:34:31

ROBERTS'06, I think.

10:34:33

REHM'06.

10:34:33

ROBERTSYeah.

10:34:33

REHMAll right.

10:34:34

ROBERTSAnd -- but this is an issue where it's not so much how the policy played out. But yesterday, on Capitol Hill, the big issue was, was Holder providing Congress with all the information they were demanding? And there were threats to hold him in contempt. There were threats to -- you know, several people said, you ought to resign. But as I say, this is the sixth time.

10:34:59

ROBERTSAnd as we were just discussing, this is one of the powers that the Republican majority now has, is to really shine the spotlight on him. And he didn't necessarily have a lot of good answers for was there information he was not providing?

10:35:12

BENDAVIDBut the hearing did get pretty testy.

10:35:14

REHMIt sure did.

10:35:14

BENDAVIDIt was a four-hour hearing, and there was a moment where Raul Labrador, who's a freshman congressman from Idaho, you know, talks about whether or not Atty. Gen. Holder should resign. And Holder's sort of fed up, and he fired back, maybe that's the way they do things in Idaho or wherever you're from. It was a sort of, you know, condescending or, you know, patronizing response. But, you know, we do see this in almost every administration.

10:35:33

BENDAVIDHenry Waxman was sort of the bane of the Bush administration, and Dan Burton was the bane of the Clinton administration. There's -- particularly in the House of Representatives, if that House is in opposition, they'll go after the president and the administration. And the fact is Republicans have never been crazy about Eric Holder. They view him as a liberal Democrat, an activist Democrat. They've always sort of been gunning for him, and this was sort of a manifestation of that.

10:35:54

REHMSo where is this going?

10:35:58

ROBERTSWell, I don't know. It's -- it would be a fascinating moment if the Republican majority tried to hold the attorney general in contempt. But this is an issue, Diane, that comes up in every single administration, Democratic or Republican. Congress wants information that the administration does not want to provide. But the problem for Holder in it is this continuing drumbeat of what are you hiding? And that's not necessarily a good thing for him.

10:36:25

REHMAll right. Let's talk briefly about Mitt Romney's victory in Florida, moving on to Nevada. Do you think he'll do as well there? He won 51 percent of the vote last time he ran there.

10:36:42

CALMESRight. Well, it's widely expected he'll do well. One big factor is that half the Republican electorate, caucus electorate in Nevada, is Mormon, as is he. And he did -- does have somewhat of a base there. And -- but it's a relatively small contest. This whole month will sort of be a relatively dry period compared to January with a number of caucuses.

10:37:12

CALMESAnd, you know -- but this is -- it's all going to depend -- there's clearly a group, a majority of Republican voters who aren't comfortable yet with him being their nominee. They're not ready to crown him. And as long as Gingrich, Santorum and Ron Paul stay in, they'll pull votes away.

10:37:31

REHMJackie Calmes of The New York Times. Short break. When we come back, your calls, your comments. I look forward to hearing from you.

10:40:04

REHMAnd it's time to go to the phones. First to Nashville, Tenn. Good morning, Carl.

10:40:12

CARLGood morning. Very interesting show. It's all across the board, but that's, whether we like it or not, politics. I'd like to step back to something that you all said about 30 minutes ago, and I have to disagree. I don't think that the Obama administration, in their re-election efforts, should shy away from asking the question, are you better off now than you were four years ago? But they have to be careful explaining it and realizing who was the president four years ago, George W. Bush.

10:40:46

CARLAnd let me tell you my little American Recovery Act story. In -- four years ago, my wife was unemployed, couldn't find a job for about a year-and-a-half under George W. Bush. Flash-forward to now, last week, she just got a $2,000 raise in her job that she has now. I took advantage of the low interest rate and cut my interest rate in half for my house and, while I was doing that, cut five years off my mortgage.

10:41:23

REHMWell, Carl, good luck to you. I'm so glad for your good fortune. Unfortunately, there are still an awful lot of people out there not doing as well.

10:41:37

BENDAVIDAnd as a political matter, you have to be really careful in asking that question unless you're very sure of what the answer is going to be for a majority of voters. Just like they always say in court, a lawyer should never ask a witness a question unless he knows exactly what the answer is, and similar thing in politics. And one of the things that the Obama people say is things got worse for a little at the beginning of their administration, which they say is because of the Bush administration.

10:41:57

BENDAVIDThen they got better. So these questions are complicated. And the caller may be absolutely right, but they have to be framed carefully from a political perspective.

10:42:04

REHMSteve, talk about Mitt Romney's comment this week that the government would take care of the poor. He was more concerned about the middle class and the upper class which would also take care of itself.

10:42:21

ROBERTSWell, the key was the way he put it. And he said, I don't care about the poor because there is the safety net. But it came across as callous in the words of Rick Santorum. That's not a Democrat. That's a Republican calling him callous. And the real damage, potential damage to Romney, is it plays into a narrative that is increasingly taking hold in the American public, which is this is a guy who doesn't have a clue what the lives of ordinary Americans are like. And he said at least half a dozen things that play into that narrative.

10:42:52

ROBERTSI like being able to fire people, betting Rick Perry $10,000, the comment we talked about earlier about letting the mortgage crisis hit rock bottom. Within hours of that comment, that was up on a Democratic National Committee ad, which is a tip-off to how the Democrats are going to use this whole string of comments. And, as I say, the importance of it is, if it was isolated, not important because it plays into an existing storyline, much more important.

10:43:19

BENDAVIDIt's true. But I was also fascinated by the extent to which conservatives and Republicans didn't like the comment. I mean, conservatives don't think the answer is, I'm not concerned with the poor because they have a safety net. They think the answer is prosperity and growth and low taxes will help everybody from the -- in fact, they don't like being divided into classes at all. They think that's class warfare.

10:43:37

BENDAVIDAnd Republicans, in general, were just afraid that it showed again that Mitt Romney isn't the best candidate, that he's not skillful. He's not deft. You know, right after this huge victory in South Carolina, seven o'clock on CNN, one of his first interviews, and he says something that becomes the story of the day. And that is attacked all day and that his surrogates and supporters have to explain. So there's a great deal of consternation on the right as well as the left because of that comment.

10:44:00

CALMESWell, for better or for worse, as far as Mitt Romney is concerned, what got lost and remains lost in this controversy over him saying he doesn't care about the very poor, which, you know, you really do need to read in context to make up your mind.

10:44:13

REHMAbsolutely.

10:44:15

CALMESExcept it does go to this narrative Steve talked about. But what got lost is that he also said in that context that he is for automatic increases in the federal minimum wage. This is a position that most Republicans have never taken and, in fact, oppose. The chamber of commerce opposes it. And so this position for which -- which is actually, you know, very moderate, Democratic-oriented is one that people aren't paying attention to. But the ones paying attention to it are the people, conservatives who oppose him on it. So he was, you know, losing on both ends yesterday.

10:44:48

REHMAll right. To Charlotte, N.C., good morning, David.

10:44:54

DAVIDMorning. My comment is about the housing and the bailout of people that were basically, I believe, either too ignorant or irresponsible to buy a house. They were -- had someone to pay 20 percent down that did the right thing. I do resent being part of the bailout of people that were irresponsible or ignorant. And that's because, when you say that they're going to do this, pay for it with a bank fee, anybody with any economic sense knows that those fees and those costs will be passed on to the consumer. And the people that are going to end up paying for it are people like me.

10:45:37

REHMJackie.

10:45:38

CALMESThis -- the caller personifies what I was saying earlier about the political pitfalls of addressing this. The problem is -- and it's a hard argument to make with the -- politicians and the administration, too, have tried to argue, and that's why they always use the adjective responsible in front of homeowners for those who they think would benefit -- is this idea that if you don't address the housing crisis to a more aggressive extent than we have to date, the economy is going to continue to recover so slowly that people will remain to be hurt.

10:46:16

CALMESThe caller said, you know, the fees will be passed on to others. Well, then, as a matter or economic principle, that's right. But you have to ask yourself, what about all the costs that are indirectly being passed on to Americans because the recovery remains so slow?

10:46:31

ROBERTSAnd it's not just individual Americans. It's -- that caller, if there's a house on his block or two houses on his block that fall into foreclosure, he could suffer. So there is a --- it's not just that you bailout individuals. You're "bailing out" a block, a city, a system, and there costs that people incur if the crisis -- who are responsible if the crisis continues.

10:46:58

REHMSo we have an email from Andy in Williston, Vt., who says, "Will the president's mortgage proposal have traction in Congress? Does it need congressional approval? Or are there elements in that proposal which can be implemented without their approval?" Naftali.

10:47:22

BENDAVIDWell, it does need congressional approval, and it's not going to get it. That's sort of the short answer. I mean, this would be funded by increase in fees on large banks. And it's something that the president can't do on his own. Republicans made very clear, right away, within moments of the announcements, this isn't something they're interested in. They don't think this is the way to save the housing market. They're not interested in imposing more fees on anybody.

10:47:41

BENDAVIDSo, I mean, I think to that degree, even though I'm sure the president believed this was the right way to go, it was a political thing. He was saying this is what I think should be done. This is the difference between me and the Republicans. And it was a statement of his, you know, being on the side of the ordinary homeowner.

10:47:53

REHMOK. But in one area, Republicans and Democrats in the Senate did come together to stop insider trading on congressional knowledge. Steve.

10:48:07

ROBERTSWell, this is a symbolic issue in many ways. A lot of senators think this was already banned. But this is sort of reinforcing the notion. And I think this is sort of a spasm of Congress reacting to the fact that as bad as Obama's numbers are, Congress is much worse. You know, popularity of Congress, 13 percent. There are a lot of reasons for that. But one of them is this view that people come to Washington and enrich themselves in all sorts of ways. And...

10:48:35

REHMWhat about lobbyists? Are they going to be under the same kinds of rules?

10:48:42

ROBERTSWell, insider trading is banned in general as a financial...

10:48:46

REHMBut it does happen.

10:48:49

ROBERTSWell, it does happen. But it is -- as I say, I think the motive here is, as much as anything, to counteract this very deep-seated anti-Washington view that Congress is a den of corruption. There was a poll just recently where majority of Americans said they'd vote out the entire Congress if they could, which is a reflection of this public attitude.

10:49:09

BENDAVIDYeah, members of Congress are not under any illusions about how popular they are. They talk about it all the time. And the more thoughtful ones -- and there are thoughtful members of Congress -- are actually really upset by it, the idea that they came here to do something -- the best ones certainly did -- and they know that they're just reviled.

10:49:23

BENDAVIDAnd so you saw -- it was sort of a spasm in a way of -- self-loathing would be overstating it. But, basically, once this bill is on the floor, there was about 30 amendments to try to make it even stiffer and even harder and even more far-reaching than it already was. Some of those amendments passed, the more far-reaching ones didn't. But this is going to pass the House. It's going to be enacted into law. I'm not sure it'll have a huge practical effect. There's not evidence that there is vast amounts of insider trading by Congress.

10:49:44

REHMInteresting.

10:49:46

BENDAVIDBut it's certainly going to be a statement and one of the few really bipartisan bills that comes out of this Congress.

10:49:50

REHMAll right. To St. Louis, Mo., good morning, Jim. You're on the air.

10:49:56

JIMI wanted to get your comments on President Obama's statements at the prayer breakfast and juxtaposed into what his administration is doing with the insurance requirements that are so opposed to by a lot of religious groups. In his statements, the prayer breakfast, he quoted repeatedly about helping the least of these and quoted from the Bible about helping the poor in a very clear -- or to say that this is a moral and Christian thing to do for the government to do that. And I just wanted to point out that, particularly conservative Christian realms, this is -- can't be further from the truth.

10:50:37

JIMIt's possible. I mean, morality does not come by forcing people either through government force or physical force to help other people. It comes from voluntary action. And I think it seems very disingenuous for President Obama to cite the Bible and act like, you know, religion and Christianity is on his side when it comes to programs for the poor by the government, not by private action.

10:51:03

JIMBut then to turn right around and institute policies that are so opposed to and so contrary to the Christian religion on the other hand, I think it's just, you know, political cynicism at its worst. And somebody really has to point out that, you know, morality does not come from the force of a gun, either it's force of a government law or anything else.

10:51:30

BENDAVIDWell, there's a couple separate issues there that the caller addressed, first of all, this idea of whether or not government helping the poor is a Christian thing or not Christian thing to do. And, obviously, that depends on people's individual view points. But it was an interesting thing that the administration did this this week, where it decided that it was going to require not churches, but church-related organizations, like universities, hospitals, charities to provide insurance for their employees that did cover contraception.

10:51:55

BENDAVIDThat was something that was very much opposed by the Catholic Church and created something of an uproar. And a lot of -- actually, a lot of religious voters have given the president some credit for the way that he talks about religion in a way that not all Democrats have been comfortable doing. And there's definitely no question about it. This alienated some Catholic voters, Catholic organizations, including some liberal Catholics that had been on his side in things like health care. And I don't think the administration necessarily was prepared for the backlash that it received.

10:52:25

ROBERTSYou know, it's important for Democrats not to allow the notion that they're the secular party. This is a church-going country. And Democrats have suffered from this in the past. And Obama's willingness to talk about his religious beliefs, the social gospel as he reads it in terms of his religious teachings, I think, is a good thing for him and for the Democratic Party. But Naftali points out that this rule has -- about requiring religious institutions, particularly Catholic institutions to provide insurance that -- at no cost for contraception has created a huge backlash in the Catholic community.

10:53:05

ROBERTSNow, a lot of Catholics would agree with his argument that the social gospel and Christianity and Jesus' teachings require social work. You know, that's why there's such a huge network of Catholic organizations that would be affected by this. But Obama won 54 percent of the Catholic vote in the last election, but only 47 percent of the white Catholic vote. If this comment and if this policy a road to support among white Catholic voters, it could be one of the more important factors in the election.

10:53:35

REHMSteve Roberts, syndicated columnist, and you're listening to "The Diane Rehm Show." One thing we did learn -- and I'm sure you all know -- 98 percent of women in this country, including Catholic women, use contraceptives. So, you know, the whole issue of young women in colleges going for contraceptives and being refused is very controversial. Jackie.

10:54:12

CALMESYeah. And it's -- you know, it's one that the administration, I think, didn't -- underestimated just how controversial it would be. And I just did want to add that, you know, this does not affect churches. The administration's ruling allows churches actually to be exempt. So we're talking, for instance, about a Catholic hospital or a Catholic college here.

10:54:35

REHMExactly. All right. Let's go to Indianapolis. Good morning, Caleb.

10:54:41

CALEBYes. Thank you for taking my call. I love your show, Diane.

10:54:44

REHMThank you.

10:54:44

CALEBI was hoping that the guests in the show would be able to talk just briefly maybe about the idea that there actually is, to a degree, some sort of class system, whether you think it's class warfare or not. And the political system seems to be -- have a -- be doing a very good job at turning issues that are actually the problem of regulators in government into issues that we're blaming on each other, one class against -- middle class against the poorest, poorest against the middle class. And I was hoping that maybe the -- your viewers and you could discuss that just briefly.

10:55:21

REHMOr listeners. Go ahead, Naftali.

10:55:24

BENDAVIDWell, that is an interesting part of the way the political discussion has developed in recent years, I think. I mean, Democrats are much more talking about how things have to happen for the middle class and for middle-class working Americans. It's who they talk about. They also talk about the poor, but less so. And Republicans have really responded, really pushed back hard in saying that's class warfare.

10:55:42

BENDAVIDEven sort of acknowledging the different races -- I'm sorry -- the different classes have different interests. You know, that's not appropriate. And so that's a lot of the debate that's going on. And I think that's one of the reasons that -- I mean, Mitt Romney said it so explicitly. He said, look, I'm not concerned with the rich because they're doing just fine. I'm not concerned with the very poor 'cause they've got the safety net, and we can improve the safety net if we need to.

10:56:02

BENDAVIDI'm concerned with the middle class, and that's the kind of language you're really hearing from Democrats. And I think it helps explain some of the uproar is the way Romney's comments fit into this discussion we've been having about that.

10:56:12

ROBERTSBut what...

10:56:12

REHMJackie.

10:56:13

CALMESWell -- and Mitt Romney also described the middle class as 90 to 95 percent, which is a sort of new slice of just about everybody. But I -- what I would say about the caller's question is that this argument we have about class warfare are two things. One, the comments that Newt Gingrich and Rick Santorum -- well, not so much Rick Santorum but that others were making in the presidential race, have sort of muted that. It's not just Democrats.

10:56:40

CALMESThey've been -- if this is class warfare, they indulged in it also. But it's the, really, these -- the elites that are talking about this, the poorest, and it isn't the middle class against the poor in reality.

10:56:49

ROBERTSOne of the problems, I think, is our definition of class. We -- America, it doesn't have class in a European sense. There's movement between classes. You're not born into a class and stuck there forever, and it's important point to make.

10:57:01

CALMESLess than there used to be, less movement.

10:57:02

REHMSyndicated columnist Steve Roberts, Jackie Calmes, The New York Times, Naftali Bendavid of The Wall Street Journal. Thank you all so much. Have a great weekend, everybody. Thanks for listening. I'm Diane Rehm.

Topics + Tags

Comments

Most Recent Shows

Thursday, Dec 08 2016The rise of digital was supposed to mean the death of things like printed books, vinyl records and brick and mortar stores. But recently, the market for analog goods and ideas has actually increased. The revenge of analog.

Thursday, Dec 08 2016The son of Donald Trump's pick for national security adviser has resigned for spreading a fake news story that led to an armed confrontation at a D.C. restaurant. The danger of fake news and how to combat it.

Wednesday, Dec 07 2016Donald Trump has called climate change "a hoax". But this week he met with Al Gore, a leader in the fight against global warming -- raising questions about Trump's position on the issue. For this month's Environmental Outlook: a look at Trump's priorities on energy and the environment.

Wednesday, Dec 07 2016The President-elect’s pick of retired neurosurgeon Ben Carson to head the Department of Housing and Urban Development could signal a dramatic shift for the agency. Join us to discuss federal housing policies and how they may change.